Layoffs at chip designer Arm hit UK hardest
Softbank had promised to double Arm's UK workforce when it acquired the firm in 2016
Chip designer Arm has let off almost 40% of its UK employees, who were employed as part of Japanese owner SoftBank's pledge to create jobs in the country.
Softbank acquired British firm Arm In 2016, promising to double the Arm's 1,770-person UK workforce at that time. It hired 1,730 individuals in the UK during the next five years, bringing the total to more than 3,500 out of a global total of 6,950.
Since then, the company has reduced 18% of its worldwide employees, with the UK suffering disproportionately, according to the Financial Times.
Arm reduced its workforce in the UK by 20%, or 700 positions, which is equivalent to little over 40% of the hiring made while SoftBank was trying to double the size of the British operations. In the rest of the world, Arm has cut the number of employees by 550.
In March, newly appointed CEO Rene Haas informed the Arm team through internal email that the company anticipated job cuts of between 12% and 15%.
The move came after the resignation of previous CEO Simon Segars in February following the failure of the $40 billion sale of Arm Holdings to Nvidia, which Segars had strongly favoured instead of an IPO.
Due to severe regulatory obstacles and fierce market resistance, that sale was cancelled.
At the time, most of the positions eliminated were based in the US and UK.
Haas said at the time that the company needed to eliminate duplication of work, be more disciplined in managing overheads and to stop further work on projects that were no longer essential to its future, in order to remain competitive in the industry.
Former employees at Arm told the FT that the prolonged uncertainty around the company's future caused an "exodus" of employees, which exacerbated the redundancy process.
The Unite union urged Arm's management to reconsider the job cuts, alleging that the company was laying off skilled staff while placing more work on those who remained.
"Arm is about people and this is a business where you want as an investor to see some stability on staffing," an investor told the FT.
According to Arm, the attrition rates in the company are "In line with current industry norms".
"Across the technology sector, businesses are being impacted by the after-effects of the global pandemic and resulting 'great resignation'," it added.
The company says it continues to employ and invest extensively in engineering talent, with a focus on "delivering a robust compute product road map that enables our partner ecosystem to build the future on Arm."
Arm said 373 of the 525 mostly technical roles being advertised by the company are in the UK.
In August, Arm reported record revenues for the first quarter, ending June 30, making it one of the few bright spots for Japanese parent SoftBank Group which reported an unprecedented $23.5 billion loss for the same period.
Arm announced total revenue of $719 million for Q1 FY 2022, an increase of 6% from the previous quarter.
The UK government is currently lobbying SoftBank to pursue a dual listing for Arm in New York and London in an effort to maintain some claim over the company.
The FT reported last month that the UK government views the opportunity to gain credit for at least some of Arm's flotation as a "big and quick win," to show it is serious about the City of London's future.